Is Your Bank Fueling Climate Change?
You may have heard the term "vote with your dollar". You understand that how you spend your money and what companies and products you support matter. But what you may not know - what most people don't know - is that we must also pay attention to what our money is doing in our banks! Because (and this might come as a surprise to many, as it did to me), it's not just sitting there, it's out in the world doing all sorts of business!
In fact, 97 cents of every dollar that you put in your bank goes right back out in the world to fund stuff. This is great because money should be put to work! And sometimes these are really good projects, like roads, renewable energy projects, ground-breaking technology, etc. But you might be upset to learn that
Trillions of dollars - your money - are fueled into environmentally damaging operations, like arctic drilling, fracking, tobacco, and oil!
When I first learned about this, I couldn't believe it. Here I am doing all I can to be a thoughtful citizen. I’m recycling as best I can, composting my food, buying my clothes second-hand, and using my social media platform to bring awareness to all these topics. Yet I had no idea that my money was indirectly funding all the things I'm trying to fight so hard. So I decided to do what seemed like the only reasonable thing to do. I broke up with my bank!
I simply took my business elsewhere.
Because there are better banks out there and in this episode of Hey Change Podcast (E54) I had the chance to speak with Benjamin Stuart, Chief Marketing Officer at Bank of The West, and learn more about what the banks are doing with our money and how to make sure to pick one that has our (and the Planet’s) best interest at heart!
Interviewer: Anne Therese Gennari
What's becoming fairly common is the term “vote with your dollar” and I think people are really starting to understand that we need to pay attention to where we spend our money. But what most people don't know is they also need to keep an eye on our money when it's just sitting in our banks. So, Ben, what is my money doing when I put it in my bank?
Interviewee: Benjamin Stuart
What most people don't realize is that when you put your money in a bank, it doesn't just sit there. 97 cents of every dollar of that gets deposited into a bank goes back out in the world, and it finances things. And sometimes it finances great stuff; like roads, or schools or small businesses. But it can also go out and finance a fracking well, or an oil well in an Arctic Refuge, or a tar sands pipeline. And so I think it's really important for people to realize that just as they're worrying about composting, recycling, or a refillable water bottle, they should also worry about what their money is doing!
And to give you just a sense of how much money banks hold, it’s about $100 trillion in deposits!
That money has incredible power to do things that are harmful to the planet. But it can also have tremendous power to accelerate change in society and accelerate things like renewable energy. I think it's my mission to really highlight the role that that money and finance plays in climate change, and in the world at large.
Interviewer: Anne Therese
Can you give us some examples? What are projects and industries and major banks are funding right now, that are not good for the planet?
Ben Stuart
The US as a country is pretty good. It's incredibly innovative, we’re the technology hub of the world in many ways, and we’re also the renewable energy hub of the world in many ways. But unfortunately, the three largest banks in our country are the three dirtiest fossil fuel banks on the planet. Their only competition for being dirtier than themselves are Chinese banks that literally have no restrictions. Some of the things that they're funding are some of the most harmful means, like extracting the last bits of fossil fuel on our planet. Things like fracking, coal, tar sands exploration…
Also — tobacco! You might think, “oh, tobacco, lung cancer, it's bad for you.” But even the tobacco industry produces 4.5 trillion cigarette butts every single year! And they're almost all made of plastic, which is essentially a microplastic, and cigarette butts are the number one most literate item on the planet. Almost every form of sea life that you do an autopsy or a necropsy on has some form of cigarette butt in its stomach.
And so there are quite a few industries that when you put a dollar in the bank, 90 cents is going back out. And it's really important to know what that 90 cents is funding.
Interviewer: Anne Therese
This might be a dumb question, but why are banks investing in these things?
Benjamin Stuart
You know, there are actually two different points of view here. One point of view is that these industries are legal. And so if they're legal banks should be allowed to finance them. The other point of view is that there's quite a bit of money. You know, Exxon Mobil at one point was one of the most profitable companies on the planet. So there's money to be made there!
But there's also the other point of view that banks have a responsibility not to be neutral in the face of climate change, and that banks need to be taking a stand and accelerating change in society.
Particular when it comes to the Climate and Energy Transition, and this is where European banks have really stood head and shoulders and have been incredible leaders in this space. So many of the European banks have taken a very strong stand to change their financing policies. I think there's an opportunity for US banks to do the same.
Interviewer: Anne Therese
Do you think that US politics have anything to do with the fact that US banks aren't further along?
Benjamin Stuart
I think for sure that politics play a role. But whether it's politics with a capital P or a lowercase p, that’s the question. But I think the power of lobbies is very well known, and the power of campaign finance donations is very well known. And so yes, I think to say that politics don't play a role would be naive and inaccurate.
Interviewer: Anne Therese
Luckily, there are better banks out there and you work for one of them Bank of the West, can you tell us what makes your bank different than many other banks?
Benjamin Stuart
There are probably three things that make us different from most banks. I think first is the environmental stance that this bank (Bank of The West) has taken. We have the strongest environmental policies of any major US Bank. I've talked about a lot of this already, you know, but we have financing policies that restrict everything from coal to fracking, to tar sands to Arctic drilling, to tobacco and palm oil production, to certain types of fishing nets that are destructive to marine life, even wood pulp production. So we have quite a few policies in place that are designed to address climate change and ensure that the planet has the appropriate level of biodiversity.
So I would say that, definitely, from an environmental stance, our bank is fundamentally different. Secondly, we have an incredible commitment to diversity and that diversity starts with our CEO named Nandita Bakhshi. She's one of only 2% of female bank CEOs worldwide. But she's also a female immigrant of color and she leads an executive team that is one-third women, one-third people of color, and collectively we speak 11 languages. So we have quite a few diversity credentials. We also received a 100% score from the Human Rights Campaign on LGBT equality!
So diversity is something that we think is incredibly important and gives us an advantage over other banks, that tend to be a bit more homogenous.
And then finally, our bank is part of one of the largest banks in Europe, BNP Paribas, and an absolute standout leader when it comes to the environment and social justice. That bank operates in 72 countries around the world and that gives us a very, very unique view. It creates a very great staff mix for us, in terms of the type of employees that we attract.
So I would say, what we say is the three things that make us different are sustainability, diversity, and global purview. And that makes us very different from the traditional large domestic bank that you see on an average street corner in the US.
Interviewer: Anne Therese
For anyone who's thinking, “Oh, snap, my money is probably most definitely out there doing some dirty work because I am one of those bigger banks”, how can they go about changing their banks to a different one?
Ben Stuart
Well, opening up a new bank account is super easy. You could probably do it with a glass of wine in about 20 minutes! And then in terms of moving your money, all you really do is ask your employer to just change where they deposit your money. It's a simple form they have, a direct deposit form that any company has and then bingo, your money is switched over to a different bank!
I would say the thing that probably gets most people tripped up about it is Bill Pay. “Wait a second, I've got all my bills, my gas bill, my cell bill, my car bill, my rent...” But even that, most of the banks now are tapping into the same database so that if you want to switch your verizon telephone bill, all you do is put your account number in, and it self-populates your bill pay information automatically.
So my guess is that if you turn that 20 minutes into 45 minutes with a glass of wine one of these nights, you could fully switch your bank and your bill pay over and be done. It's not that big of a pain and, again, I think when you start comparing it to the other activities that we do — refilling a water bottle, recycling, composting, etc, this is a one and done activity. It's not something you have to do every day.
It’s unquestionable that your bank is part of your personal supply chain and to take care of it and look after it and analyze it just like you do other parts of your life makes a ton of sense.
Interviewer: Anne Therese
I love that you say pour a glass of wine. I don't say everyone is a drinker, but it doesn't have to be a mundane task. You can just say to yourself, “Okay, I'm going to sit down for an hour with a glass of wine, and I'm going to empower myself and make sure that moving forward, I will have my money in a bank that is funding the betterment of our planet, and not the destruction thereof.”
So how do you find a good bank? What are some questions people should be asking themselves or the bank when finding one to trust and go for?
Ben Stuart
The question I always ask is: What are your policies?
Because what I've seen (and I've seen some of the banks that don't have strong backbone policies ) is that if you look on their website, and you read you like, “Wow, these guys are really committed to the environment! They've got this pledge, and they've got this commitment…” I don't really pay that much attention to the copywriting and the pledges and the promises, I look for policies!
So I think the first question you can ask is, do you guys have any policies related to what you do with your customer’s deposits, whether their consumer deposits or their business deposits? Ask what policies they have!
Interviewer: Anne Therese
To be completely realistic, not everyone is going to wake up and do their work and move their money to a different bank. I think we have to understand and be realistic about that. But even if a few of us do it, do you think it will have an impact on a bigger scale?
Ben Stuart
Yeah, in some ways, it's a little bit like voting, right? I think the power of the collective is incredibly important. And if you believe in the power of capitalism and the free market, that businesses tend to follow what consumers are doing, then if consumers move in mass, you can change an entire market.
Just think about what's happened with organics! Consumers are starting to man demand organics, they even sell organic yogurt in Walmart now. If you would have asked me 10 years ago, would anybody ever pay $45 for a reusable water bottle? No way! But now everybody's got a Hydroflask! And they're going back and spending $15 Every time they lose the cap.
So that’s the power that consumers have when they change their behavior. Industries notice and industry shift, and so I absolutely think that individual action matters.
